Who would do a better job of running the USA? Topic

A handful of big-name firms and many small ones are making major changes to their health care plans this fall, and while some big companies are blaming the Affordable Care Act, insurance and economic experts call those claims an exaggeration.

Making health insurance changes, including big premium and deductible hikes when the rate of increase in health care costs has slowed, creates a "messaging issue," says University of Michigan business economics professor Thomas Buchmueller.

"That's not an easy conversation," says Buchmueller. "It's convenient to say, 'the ACA is raising our costs.'"

Big companies citing the ACA are "using this as cover," says Farzan Bharucha, a health care strategist for consulting firm Kurt Salmon. "Companies are making a business decision that by dropping or limiting coverage you won't have employees leave."

Still, there has been big news from some big companies — and even a major university — and some cite the new law.

Among them:

Darden Restaurants. The owner of Red Lobster, Olive Garden and LongHorn Steakhouse, decided last fall to hire fewer full-time workers and more part-time workers to lessen expected costs of insuring full-time workers under the ACA. But it reversed the policy in December after complaints. The company recently decided to give employees a designated sum of money to use to choose their own insurer and plan level through a private online exchange that is separate from the new government exchanges. Darden says the move is unrelated to the health law. Private exchanges are an increasingly popular way for employers to reduce their health costs without cutting coverage for employees, who would be considered insured for the purposes of the ACA.

Home Depot. The retailer said last month that full-time employees' insurance plans will cost more this fall because its insurance prices had risen. Spokesman Stephen Holmes wouldn't comment on whether that was due to the ACA: "We don't discuss our cost structure, so I'm not going to point specifically to any one thing." The home-improvement chain also said in September that it's sending about 20,000 part-time employees who had low-cost/low-benefit "mini-med" plans prohibited under ACA to the new federal and state marketplaces to buy their own insurance. Holmes wouldn't disclose whether workers will get a subsidy to pay for their new insurance, but these plans are nearly always paid fully by employees.

Securitas. The large security-guard provider Securitas said last week that it's sending 55,000 employees to the new state exchanges to buy their own insurance plans. The move was in response to the prohibition of "mini-med" insurance plans that the company previously provided. Spokesman Jim McNulty says the company didn't contribute to the plans and will not be giving workers money to buy on the exchanges. He expects most of the workers on the plans — 90% of whom are full time — will qualify for government subsidies.

• Sears. The retailer decided to give employees a set amount of money to choose their own health care insurer and benefits through an online private exchange run by Aon. "The Affordable Care Act motivated us to think differently about the health care benefits that we provide associates," says spokesman Howard Riefs. But, he noted, "The final decision to proceed with a private exchange model was made independent of Affordable Care Act considerations."

UPS. The delivery company dropped health insurance for about 15,000 of its employees' spouses whose employers also offered insurance. In a memo to workers, the company said it expects the cost of medical care in 2014 is to increase about 7.25% compared to 2013 and said an additional 4% rise would be due to the Affordable Care Act. It cited the need to cover dependent children longer and the expected rise in the number of employees enrolling in plans. The University of Virginia also dropped this type of spousal coverage and blamed the health law last month.

"There's nothing in the ACA that would make dropping spousal coverage be an obvious response," says Buchmueller. "That's the type of strategy firms have been doing for a while."

Most large companies made any big ACA-related changes to their health insurance plan two years ago, says Bryce Williams, managing director of global benefits company Towers Watson Exchange Solutions. He says only about one in 10 of the major companies Towers represents are making major changes to their health plans this year. Towers Watson represents about 80% of the companies on the Fortune 500, he says.

Some changes, like the elimination of mini-med plans, can benefit employees. Some workers were shocked to find how little coverage they had when they landed in emergency rooms. Private exchanges, which IBM and Walgreens have also announced they're moving employees to — can be what Williams calls a "win-win" for workers and employers. Many other experts warn that employers' contributions may not keep up with premium increases.

It's far more believable for a small company to cite the new law than for big employers to do so as it's had little effect on them financially this year, says Allen Wishner, CEO of Flexible Benefit Service Corp., which serves insurance brokers for small to mid-sized companies.

These companies have far more regulatory burdens and costs associated with the new law, he says. In July, those employing more than 50 workers were given another year to provide insurance to all full-time workers or face a $2,000-per-employee fine.

"I struggle to see what's different" for large employers, says Wishner, a director of the Employers Council on Flexible Compensation. "The delay kept the status quo for the most first part."

Smaller employers may wind up sending employees to the government exchanges because of the "expense of it and the administrative burden of offering insurance," says Ed O'Malley, president of the corporate client group for National Financial Partners, which advises companies on ACA compliance and health care, and manages private exchanges. "In industries, that are more competitive, it may be more difficult to not offer health insurance."

10/8/2013 10:12 PM
Posted by bad_luck on 10/8/2013 8:01:00 PM (view original):
Posted by examinerebb on 10/8/2013 7:43:00 PM (view original):
I'm saying I don't even consider doing it without the ACA.
No, you'd lay them off instead.
Correct.  And I'd (try to) hire them back on the first cycle of the next upswing.  With the ACA, I'm very strongly considering laying them off anyway (just delaying it until after I've dumped the healthcare costs), and/or skipping a hiring cycle on the upswing.  Same staff/productivity + more profits = happy investment capital group.
10/8/2013 11:01 PM (edited)
I don't see how the ACA affects any of that. You keep them if you have enough business to need them, get rid if them if you don't. It's a demand driven economy.
10/8/2013 11:08 PM
Posted by MikeT23 on 10/8/2013 1:44:00 PM (view original):
Posted by The Taint on 10/8/2013 12:57:00 PM (view original):
It's also widely thought that UPS is using the ACA as an excuse to do this. They've been looking to do it forever.

How many companies are using the ACA as en excuse to once again maximize profits?
Shouldn't a company look to maximize profits?

Should the gov't give them a means to do so?
Depends on how many pockets that extra profit is going into. If the entire company is realizing profit.....that's awesome. If its one guy, or one board of directors...then it might not be for the best.

Tougher question to explain, and I'm on my iPad right now, don't want to type it all out with the touchscreen. Maybe later.
10/8/2013 11:10 PM
Posted by bad_luck on 10/8/2013 11:08:00 PM (view original):
I don't see how the ACA affects any of that. You keep them if you have enough business to need them, get rid if them if you don't. It's a demand driven economy.
Then you're willfully ignoring the point.

Before the ACA I couldn't get away with taking away the company-sponsored healthcare.  I would be effectively telling my employees "You used to have healthcare, now you have none."  I'd be very worried that would result in a mass exodus of staff.  I'm certain there are measurables out there in the form of comanies who tried it that would tell me my worries were well founded.

Now I can spin it into telling them "You used to get healthcare through us, now you just get it somewhere else."  I'd have to figure out whether or not I think that would result in a mass exodus of staff.  I don't have any measurables to tell me one way or the other, because I'm not the one trying to make that decision.  I'm fairly sure those measurables don't exist, even if I was.  My guess is that we wouldn't lose much staff at all, given the current market, which would make it very, very tempting.
10/8/2013 11:56 PM
I think you'd lose more staff than you think. Maybe not right away but over time. You definitely would get a subpar workforce. The better candidates will work at the places that offer better benefit packages.

For example, my tavern offers paid vacation, a (terrible) health plan, and free food and drink even when you're not working. We have zero turnover, a crack staff, and happy employees all the way around.

The owners could be making more, but they know they are better served by kicking a bunch of that profit down. Zero shrinkage also, which is huge in the restaurant/bar biz.
10/9/2013 12:53 AM
Posted by The Taint on 10/9/2013 12:53:00 AM (view original):
I think you'd lose more staff than you think. Maybe not right away but over time. You definitely would get a subpar workforce. The better candidates will work at the places that offer better benefit packages.

For example, my tavern offers paid vacation, a (terrible) health plan, and free food and drink even when you're not working. We have zero turnover, a crack staff, and happy employees all the way around.

The owners could be making more, but they know they are better served by kicking a bunch of that profit down. Zero shrinkage also, which is huge in the restaurant/bar biz.

Those are only factors if the other companies in your industry don't follow suit over time.  I don't need to retain my employees forever with an inequitable benefit package by comparison - I just have to keep them until I have a quarter or two worth of financials that are released to the public (read: shareholders/investors of the other companies).

I work in an industry that already sources somewhere between 40% and 60% of production outside of the country for cheaper labor costs, despite an exponentially lower level of quality in the product that results from it.  Does another company in the industry hold out in the face of immediate and sustainable profits, in order to try to assemble a top-notch workforce?  How many do you think have shareholders/investors that will be that patient?

10/9/2013 2:30 AM
Posted by bad_luck on 10/8/2013 11:08:00 PM (view original):
I don't see how the ACA affects any of that. You keep them if you have enough business to need them, get rid if them if you don't. It's a demand driven economy.
Of course you don't.

On the other hand, if roles were reversed and the ACA was an initiative of the right instead of the left, you no doubt would see it quite clearly.
10/9/2013 8:03 AM
Posted by tecwrg on 10/8/2013 8:01:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:27:00 PM (view original):
Posted by moy23 on 10/8/2013 6:21:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:17:00 PM (view original):
Posted by examinerebb on 10/8/2013 5:47:00 PM (view original):
I think the possibility exists, with a much larger likelihood than it did before.  I think that, if I were running the company, I would seriously consider it.  As for what someone other than me will decide to do, I can't tell you that.  We'll see.
So, in this hypothetical, you're running the company. Last year, without penalty, you could have dropped coverage for your employees but didn't. This year there is a penalty if you do. And now you're more likely to drop benefits? That makes no sense.

If you do, your good employees will leave. Most companies are not dropping benefits for their employees.

 
most companies are dropping benefits for their employees of some kind - if not healthcare then its something else.
If not healthcare it's irrelevant to this discussion.

Source on the healthcare drops?
UPS, for one, has dropped spousal coverage if the spouse can get healthcare coverage from their own employer.

That is a drop in healthcare benefits.  Because of the ACA.
As is the fact I was only able to fund my HSA up to $2500 this year for my second kid because of the ACA whereas I was able to go to $5000 for my 1st kid. This one specifically hit the middle class hardest.
10/9/2013 8:33 AM (edited)
Posted by examinerebb on 10/8/2013 7:43:00 PM (view original):
I'm saying I don't even consider doing it without the ACA.
I work with 1000s of small to extremely large business owners/ceos every year and exactly what you said here is common sentiment across the board.
10/9/2013 8:31 AM
Posted by moy23 on 10/9/2013 8:33:00 AM (view original):
Posted by tecwrg on 10/8/2013 8:01:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:27:00 PM (view original):
Posted by moy23 on 10/8/2013 6:21:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:17:00 PM (view original):
Posted by examinerebb on 10/8/2013 5:47:00 PM (view original):
I think the possibility exists, with a much larger likelihood than it did before.  I think that, if I were running the company, I would seriously consider it.  As for what someone other than me will decide to do, I can't tell you that.  We'll see.
So, in this hypothetical, you're running the company. Last year, without penalty, you could have dropped coverage for your employees but didn't. This year there is a penalty if you do. And now you're more likely to drop benefits? That makes no sense.

If you do, your good employees will leave. Most companies are not dropping benefits for their employees.

 
most companies are dropping benefits for their employees of some kind - if not healthcare then its something else.
If not healthcare it's irrelevant to this discussion.

Source on the healthcare drops?
UPS, for one, has dropped spousal coverage if the spouse can get healthcare coverage from their own employer.

That is a drop in healthcare benefits.  Because of the ACA.
As is the fact I was only able to fund my HSA up to $2500 this year for my second kid because of the ACA whereas I was able to go to $5000 for my 1st kid. This one specifically hit the middle class hardest.
Good point.  We had planned medical expenses (i.e. braces for my older son, a few other things) a couple of years ago that led us to go up to $5000 for our FSA that year.  If my younger son eventually needs braces, we'll be going well over $2500, so that excess will be coming out of after-tax, out-of-pocket money,

A friend of mine has a child who had a kidney transplant a couple of years ago, and has been coping with numerous related medical issues since.  His financial situation was on the lower end of middle class to begin with.  The reduction of his FSA/HSA from $5000 to $2500 has hit him very hard.

10/9/2013 8:37 AM
Real life experiences don't count. 

Besides, even if they did, all that extra money you are spending is helping to provide better healthcare for those who you are not yet supporting under medicare. 

It's a good thing...
10/9/2013 8:47 AM
Posted by moy23 on 10/9/2013 8:33:00 AM (view original):
Posted by tecwrg on 10/8/2013 8:01:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:27:00 PM (view original):
Posted by moy23 on 10/8/2013 6:21:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:17:00 PM (view original):
Posted by examinerebb on 10/8/2013 5:47:00 PM (view original):
I think the possibility exists, with a much larger likelihood than it did before.  I think that, if I were running the company, I would seriously consider it.  As for what someone other than me will decide to do, I can't tell you that.  We'll see.
So, in this hypothetical, you're running the company. Last year, without penalty, you could have dropped coverage for your employees but didn't. This year there is a penalty if you do. And now you're more likely to drop benefits? That makes no sense.

If you do, your good employees will leave. Most companies are not dropping benefits for their employees.

 
most companies are dropping benefits for their employees of some kind - if not healthcare then its something else.
If not healthcare it's irrelevant to this discussion.

Source on the healthcare drops?
UPS, for one, has dropped spousal coverage if the spouse can get healthcare coverage from their own employer.

That is a drop in healthcare benefits.  Because of the ACA.
As is the fact I was only able to fund my HSA up to $2500 this year for my second kid because of the ACA whereas I was able to go to $5000 for my 1st kid. This one specifically hit the middle class hardest.
Are you sure you aren't talking about an FSA???
10/9/2013 7:25 PM
Posted by tecwrg on 10/9/2013 8:37:00 AM (view original):
Posted by moy23 on 10/9/2013 8:33:00 AM (view original):
Posted by tecwrg on 10/8/2013 8:01:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:27:00 PM (view original):
Posted by moy23 on 10/8/2013 6:21:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:17:00 PM (view original):
Posted by examinerebb on 10/8/2013 5:47:00 PM (view original):
I think the possibility exists, with a much larger likelihood than it did before.  I think that, if I were running the company, I would seriously consider it.  As for what someone other than me will decide to do, I can't tell you that.  We'll see.
So, in this hypothetical, you're running the company. Last year, without penalty, you could have dropped coverage for your employees but didn't. This year there is a penalty if you do. And now you're more likely to drop benefits? That makes no sense.

If you do, your good employees will leave. Most companies are not dropping benefits for their employees.

 
most companies are dropping benefits for their employees of some kind - if not healthcare then its something else.
If not healthcare it's irrelevant to this discussion.

Source on the healthcare drops?
UPS, for one, has dropped spousal coverage if the spouse can get healthcare coverage from their own employer.

That is a drop in healthcare benefits.  Because of the ACA.
As is the fact I was only able to fund my HSA up to $2500 this year for my second kid because of the ACA whereas I was able to go to $5000 for my 1st kid. This one specifically hit the middle class hardest.
Good point.  We had planned medical expenses (i.e. braces for my older son, a few other things) a couple of years ago that led us to go up to $5000 for our FSA that year.  If my younger son eventually needs braces, we'll be going well over $2500, so that excess will be coming out of after-tax, out-of-pocket money,

A friend of mine has a child who had a kidney transplant a couple of years ago, and has been coping with numerous related medical issues since.  His financial situation was on the lower end of middle class to begin with.  The reduction of his FSA/HSA from $5000 to $2500 has hit him very hard.

You realize that HSA =/= FSA?

The family cap for HSA contributions in 2014 is $6550.

 
10/9/2013 7:30 PM
Posted by bad_luck on 10/9/2013 7:25:00 PM (view original):
Posted by moy23 on 10/9/2013 8:33:00 AM (view original):
Posted by tecwrg on 10/8/2013 8:01:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:27:00 PM (view original):
Posted by moy23 on 10/8/2013 6:21:00 PM (view original):
Posted by bad_luck on 10/8/2013 6:17:00 PM (view original):
Posted by examinerebb on 10/8/2013 5:47:00 PM (view original):
I think the possibility exists, with a much larger likelihood than it did before.  I think that, if I were running the company, I would seriously consider it.  As for what someone other than me will decide to do, I can't tell you that.  We'll see.
So, in this hypothetical, you're running the company. Last year, without penalty, you could have dropped coverage for your employees but didn't. This year there is a penalty if you do. And now you're more likely to drop benefits? That makes no sense.

If you do, your good employees will leave. Most companies are not dropping benefits for their employees.

 
most companies are dropping benefits for their employees of some kind - if not healthcare then its something else.
If not healthcare it's irrelevant to this discussion.

Source on the healthcare drops?
UPS, for one, has dropped spousal coverage if the spouse can get healthcare coverage from their own employer.

That is a drop in healthcare benefits.  Because of the ACA.
As is the fact I was only able to fund my HSA up to $2500 this year for my second kid because of the ACA whereas I was able to go to $5000 for my 1st kid. This one specifically hit the middle class hardest.
Are you sure you aren't talking about an FSA???
Yep - FSA was reduced to $2500
10/9/2013 8:43 PM
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Who would do a better job of running the USA? Topic

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